Once you find your dream home, the next step is to find the right loan to finance its acquisition. Few people have the cash on hand to purchase such an expensive asset, after all. Most will have to borrow money from a lending institution to get the property. They will then pay this back, along with interest, in small monthly instalments for a period of years. It’s a big commitment that no one should take lightly. Taking on an expensive loan can lead to defaults and credit issues in the future. Borrowers should work with knowledgeable professionals such as loan officers or mortgage brokers.
Loan officers are salaried individuals working for a particular bank. Mortgage brokers, meanwhile, work directly for their clients who are the borrowers themselves. They are not tied to a single institution but they have a wide network of connections. They are essentially middlemen who can connect you with various wholesale lenders and do most of the heavy lifting. Both types of professionals can be immensely helpful, especially for people who are applying for such a loan for the first time. They will provide the guidance to ensure a quick approval and long-term success. Opt for a mortgage broker if you want to get the following benefits:
1. Shop for the best deal.
Loan officers are tied to their respective banks. They can only offer what their own company’s programs to the loan applicants. This may not always be suitable for the individual. You will either have to take an ill-fitting loan arrangement or hop from bank to bank just to find a good match. Meanwhile, working with a mortgage broker is quite different in that they can offer you a wider range of options. Be candid about your needs and your current financial status so that they can provide you with the right loan. They can look for the best deal among everything that’s available today.
2. Get special rates.
Individual borrowers do not have a lot of bargaining power, especially since the amounts that they are negotiating with banks are typically small for these institutions. On the other hand, mortgage brokers represent multiple clients and bring a steady stream of business to lending companies. This gives them leverage when negotiating deals. They can usually get more favorable rates for their clients so you can enjoy lower interest over the long term. Other perks may also apply.
3. Waive some fees.
If you work with a loan officer, then you are bound to the rules of that particular bank. Make sure that you are aware of all the fees attached to the loan as these can add up to a significant sum. Those who have a tight budget might find themselves having to stretch their limits. Some mortgage brokers can have a few of the fees waived for their clients. This should provide some relief for people who just really want to get a straightforward loan as soon as possible.
4. Have an easier time.
Securing a loan can be a stressful process. There are so many requirements that you will have to submit. Banks will check your background and ask all sorts of questions. Some of these may be uncomfortable for you to answer. A mortgage broker will make things easier by personally guiding your through every stage of the process. You will know exactly what to expect and how to present yourself in order to get an approval. Brokers will also do much of the legwork so you can focus on other things instead of being consumed by the loan application. It’s a great option for busy individuals.